Farm groups fret over California minimum wage increase

Farm groups are concerned that California legislation to raise the state's minimum wage to $10 an hour by 2016 would squeeze margins for producers and packing houses. The bill passed in the waning hours of the legislative session on Sept. 12, and Gov. Jerry Brown has said he will sign it.

SACRAMENTO — Farm groups are concerned that legislation to raise California’s minimum wage to $10 an hour by 2016 will further squeeze the margins of producers and packers already grappling with high input costs.

The Legislature approved Assembly Bill 10 in the waning hours of its 2013 session on Sept. 12, and Gov. Jerry Brown has said he will sign it. The bill by Assemblyman Luis Alejo, D-Watsonville, would gradually increase the minimum wage from the current $8 an hour.

The bill could have a minimal immediate impact on field workers, most of whom are paid by the bin and negotiate a higher price than they’d receive at $10 an hour.

“If they can’t make $8 or $10, they won’t even show up for work,” said Adin Hester, president of the Olive Growers Council of California in Visalia. “If it’s a good crop, good pickers can probably make $80 or $100 in six hours. That’s significantly more than 10 bucks an hour.”

But in packing houses, a raise in the minimum wage will put pressure on management to give comparable increases to higher-earning workers, said Shirley Batchman, California Citrus Mutual’s director of government affairs. Often, the higher costs can’t be passed on to consumers, she said.

That eventually could begin to impact producers, who are already facing higher costs because of environmental regulations, Batchman said.

“If you also have to start paying labor more to harvest your grove, then that once again is an input cost,” she said. “It will have an impact, no doubt.”

The bill was hailed by the United Farm Workers, which has spent the last three years lobbying lawmakers to adopt at least a $2 increase. The idea came out of focus groups the union held with farm workers, UFW president Arturo S. Rodriguez said.

“We know thousands of farm workers and their families will truly benefit from the $2 raise,” Rodriguez said in a statement.

However, the California Farm Bureau Federation was among many agriculture-related groups that lined up in opposition to the bill. Officials from the CFBF did not respond to repeated requests through its communications office for comment.

Other groups that opposed the bill included the California Association of Winegrape Growers, California Dairies Inc., the California Grape and Tree Fruit League, the California Tomato Growers Association, the California Pear Growers Association and Western Growers Association.

Opponents, led by the California Chamber of Commerce, argued the bill would endanger the state’s economic recovery by forcing employers to lay people off or raise their prices, an Assembly Committee on Labor and Employment bill analysis states.

In Washington state, which currently has the top statewide minimum wage of $9.19 an hour, farmers and ranchers saw their production costs increase by 23 percent from 2011 to 2012, according to USDA statistics. In the same period, California farmers’ costs increased by less than 1 percent.

But proponents of the Golden State’s minimum wage increase point to a University of California-Berkeley study of the impacts of San Francisco’s $10.50-an-hour minimum wage. The study found the city’s wage had no measurable effect on employment growth but raised the purchasing power of low-wage workers, according to the bill analysis.